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Marlin Business Services Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: November 2, 2012 04:08PM

Marlin Business Services Corp. (MRLN) filed Quarterly Report for the period ended 2012-09-30. Marlin Business Services Corp has a market cap of $269.9 million; its shares were traded at around $20.53 with a P/E ratio of 32.1 and P/S ratio of 4.3. The dividend yield of Marlin Business Services Corp stocks is 1.5%.



Highlight of Business Operations:

For the three-month period ended September 30, 2012 compared to the three-month period ended September 30, 2011, net interest and fee income increased $3.7 million, or 32.2%, primarily due to the impact of the 24.8% million increase in average total finance receivables, combined with a lower cost of funds on liabilities. The provision for credit losses increased $0.6 million, or 75.0%, to $1.4 million for the three-month period ended September 30, 2012 from $0.8 million for the same period in 2011, primarily due to portfolio growth, partially offset by lower charge-offs and improved delinquencies. Other expenses increased $0.6 million, or 6.7%, for the three-month period ended September 30, 2012 compared to the three-month period ended September 30, 2011, primarily due to increased lease origination volume and increased sales compensation expense.

Interest income, net of amortized initial direct costs and fees, increased $2.6 million, or 23.4%, to $13.7 million for the three-month period ended September 30, 2012 from $11.1 million for the three-month period ended September 30, 2011. The increase in interest income was principally due to the 24.8% increase in average total finance receivables, which increased $89.2 million to $448.7 million at September 30, 2012 from $359.5 million at September 30, 2011, partially offset by a decrease in average yield of 12 basis points. The increase in average total finance receivables was primarily due to an increase in the number of sales account executives and higher application approval rates, combined with the continued seasoning and development of our sales account executives. The average yield on the portfolio decreased, primarily due to lower yields on the new leases compared to the yields on the leases repaying. The weighted average implicit interest rate on new finance receivables originated increased 42 basis points to 12.97% for the three-month period ended September 30, 2012, compared to 12.55% for the three-month period ended September 30, 2011.

For the nine-month period ended September 30, 2012 compared to the nine-month period ended September 30, 2011, net interest and fee income increased $9.1 million, or 27.7%, primarily due to a 18.6% increase in average total finance receivables, combined with a lower cost of funds on liabilities. The provision for credit losses increased $0.6 million, or 20.7%, to $3.5 million for the nine-month period ended September 30, 2012 from $2.9 million for the same period in 2011. The impact of portfolio growth was partially offset by lower charge-offs and improved delinquencies. Other expenses increased $2.3 million, or 8.5%, for the nine-month period ended September 30, 2012, compared to the nine-month period ended September 30, 2011, primarily due to increased lease origination volume, increased sales compensation expense and additional compensation related to the achievement of certain performance criteria determined annually.

Interest income, net of amortized initial direct costs and fees, increased $5.8 million, or 17.7%, to $38.6 million for the nine-month period ended September 30, 2012 from $32.8 million for the nine-month period ended September 30, 2011. The increase in interest income was principally due to a 18.6% increase in average total finance receivables, which increased $65.7 million to $419.0 million at September 30, 2012 from $353.3 million at September 30, 2011, partially offset by a decrease in average yield of 12 basis points. The increase in average total finance receivables was primarily due to an increase in the number of sales account executives and higher application approval rates, combined with the continued seasoning and development of our sales account executives. The average yield on the portfolio decreased, primarily due to lower yields on the new leases compared to the yields on the leases repaying. The weighted average implicit interest rate on new finance receivables originated increased 1 basis point to 12.97% for the nine-month period ended September 30, 2012, compared to 12.96% for the nine-month period ended September 30, 2011.

Salaries and benefits expense. Salaries and benefits expense increased $1.8 million, or 10.7%, to $18.7 million for the nine months ended September 30, 2012 from $16.9 million for the same period in 2011. The increase was primarily due to increased sales compensation and additional compensation related to the achievement of certain performance criteria determined annually. Salaries and benefits expense, as an annualized percentage of average total finance receivables, was 5.94% for the nine-month period ended September 30, 2012 compared with 6.37% for the same period in 2011. Total personnel increased to 258 at September 30, 2012 from 247 at September 30, 2011, primarily due to increased sales staffing levels, which were 112 sales account executives at September 30, 2012, compared to 95 sales account executives at September 30, 2011.

Read the The complete Report



Stocks Discussed: MRLN,
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